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Law360 (March 27, 2020, 4:59 PM EDT ) The U.S. Securities and Exchange Commission has further extended its guidance and relief to companies grappling with the fallout from the spread of the novel coronavirus, temporarily easing certain compliance requirements for corporations, municipal advisers and crowdfunded groups.
On Thursday, the SEC said corporations that can't fulfill the notarization requirement to access its filing system can still submit forms, under the condition that they explain how COVID-19 affected them and submit a notarized copy within 90 days of accessing EDGAR. That temporary final rule lasts through July 1, the agency said.
Crowdfunding companies that issue securities will also have an extra 45 days to file reports that would otherwise have been due from March 26 through May 31, the SEC said. Those conditions include that the company must tell investors it's relying on the temporary final rule and explain why it couldn't do so earlier, according to the announcement.
Municipal advisors filing with the SEC were also given similar 45-day deadline extensions and caveats for their filings otherwise due through June 30.
The agency added that it may still further extend those deadlines if it decides it's necessary.
On March 25, the SEC's Division of Corporate Finance offered detailed guidance on how companies should assess and communicate COVID-19 risks, encouraging firms to be proactive and revise their filings accordingly. Agency staff encouraged timely reporting but acknowledged that the coronavirus poses widespread risks that are difficult to predict with precision.
"We also recognize that the actual impact will depend on many factors beyond a company's control and knowledge," staff wrote. "Nevertheless, the effects COVID-19 has had on a company, what management expects its future impact will be, how management is responding to evolving events, and how it is planning for COVID-19-related uncertainties can be material to investment and voting decisions."
The new guidance lays out scores of questions companies should be asking as they assess the impact of the coronavirus on everything from liquidity to supply chains to access to credit.
The agency encouraged companies to think long-term about how the current economic outlook could affect their financial stability, asset values and future consumer demand for their products. But the guidance also encouraged a granular analysis of how things like remote work could affect internal controls and business continuity plans.
Also this week, the agency said it was extending the filing periods covered by an order earlier this month that conditionally provides public companies an extra 45 days to turn in certain regulatory disclosures. Originally, the relief covered disclosure reports that would have otherwise been due between March 1 and April 30, but that cutoff is now July 1.
The regulator has also issued orders providing investment funds and advisers with a longer time frame for exemption from having to hold in-person board meetings and fulfilling certain filing and delivery deadlines.
The SEC on March 4 issued an order giving public companies six additional weeks to submit a range of materials covered by the Securities Exchange Act and associated regulations. In order to qualify for the relief, companies must submit a report explaining why the relief is needed within 45 days of the original deadline, when they expect to file the required materials and, if needed, a risk factor explaining the impact of the coronavirus on their business.
Then, on March 13, the agency announced that until June 15, funds and investment advisers affected by the coronavirus can apply for exemptions from a requirement that certain agreements and plans have to be approved by a board of directors' in-person vote. The window for that exemption has since been extended to Aug. 15.
The regulator also handed down an order on March 13 that extended filing deadlines for certain forms and reports originally owed by investment companies before April 30. That relief is now available for documents originally due before June 30, and investment companies and advisers no longer need to tell the SEC why they are relying on the relief or when they expect to file the required materials.
--Additional reporting by Dean Seal and Jack Queen. Editing by Alanna Weissman.
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